II

106TH CONGRESS

1ST SESSION S. 1457

To amend the Energy Policy Act of 1992 to assess opportunities to increase

carbon storage on national forests derived from the public domain and

to facilitate voluntary and accurate reporting of forest projects that

reduce atmospheric carbon dioxide concentrations, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 29, 1999

Mr. WYDEN (for himself and Mr. CRAIG) introduced the following bill; which

was read twice and referred to the Committee on Energy and Natural

Resources

A BILL

To amend the Energy Policy Act of 1992 to assess opportunities to increase carbon storage on national forests derived from the public domain and to facilitate voluntary

and accurate reporting of forest projects that reduce

atmospheric carbon dioxide concentrations, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Forest Resources for

5 the Environment and the Economy Act’’.
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1 SEC. 2. FINDINGS AND PURPOSES.

2 (a) FINDINGS.—Congress finds that—

3 (1) the Federal Government should increase the

4 forest carbon storage on public land while pursuing

5 existing statutory objectives;

6 (2) insufficient information exists on the oppor7 tunities to increase carbon storage on public land

8 through improvements in forest land management;

9 (3) important environmental benefits to na10 tional forests can be achieved through cooperative

11 forest projects that enhance fish and wildlife habi12 tats, water, and other resources on public or private

13 land located in national forest watersheds;

14 (4) forest projects also provide economic bene15 fits, including—

16 (A) employment and income that con17 tribute to the sustainability of rural commu18 nities; and

19 (B) ensuring future supplies of forest

20 products;

21 (5) monitoring and verification of forest carbon

22 storage provides an important opportunity to create

23 employment in rural communities and substantiate

24 improvements in natural habitats or watersheds due

25 to forestry activities; and
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1 (6) sustainable production of biomass energy

2 feedstocks provides a renewable source of energy

3 that can reduce carbon dioxide emissions and im4 prove the energy security of the United States by di5 versifying energy fuels.

6 (b) PURPOSE.—The purpose of this Act is to promote

7 sustainable forestry in the United States by—

8 (1) increasing forest carbon sequestration in the

9 United States;

10 (2) improving the health of national forests;

11 (3) enhancing wildlife and fish habitats;

12 (4) improving water quality;

13 (5) providing employment and income to rural

14 communities;

15 (6) providing new sources of forest products;

16 and

17 (7) increasing use of renewable biomass energy

18 and improving the energy security of the United

19 States.

20 SEC. 3. DEFINITIONS.

21 In this Act:

22 (1) FORESTRY CARBON ACTIVITY.—The term

23 ‘‘forestry carbon activity’’ means a forest manage24 ment action that—
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1 (A) increases long-term carbon storage;

2 and

3 (B) has a positive impact on watersheds,

4 fish habitats, and wildlife diversity.

5 (2) FOREST CARBON RESERVOIR.—The term

6 ‘‘forest carbon reservoir’’ means trees, roots, soils, or

7 other biomass associated with forest ecosystems or

8 products from the biomass that store carbon.

9 (3) FOREST CARBON STORAGE.—The term

10 ‘‘forest carbon storage’’ means the quantity of car11 bon sequestered from the atmosphere and stored in

12 forest carbon reservoirs, including forest products.

13 (4) FOREST LAND.—

14 (A) IN GENERAL.—The term ‘‘forest land’’

15 means land that is, or has been, at least 10 per16 cent stocked by forest trees of any size.

17 (B) INCLUSIONS.—The term ‘‘forest land’’

18 includes—

19 (i) land that had such forest cover

20 and that will be naturally or artificially re21 generated; and

22 (ii) a transition zone between a for23 ested and nonforested area that is capable

24 of sustaining forest cover.

25 (5) FOREST MANAGEMENT ACTION.—
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1 (A) IN GENERAL.—The term ‘‘forest man2 agement action’’ means the practical application

3 of forestry principles to the regeneration, man4 agement, utilization, and conservation of forests

5 to meet specific goals and objectives, while

6 maintaining the productivity of the forests.

7 (B) INCLUSIONS.—The term ‘‘forest man8 agement action’’ includes management of for9 ests for aesthetics, fish, recreation, urban val10 ues, water, wilderness, wildlife, wood products,

11 and other forest values.

12 (6) NATIONAL FOREST WATERSHED.—The term

13 ‘‘national forest watershed’’ means a watershed—

14 (A) that contains national forest land;

15 (B) that consequently has unique interest

16 to Federal land managers; and

17 (C) in which all landowners, including the

18 Federal Government, share interest and influ19 ence in the management and health of the wa20 tershed.

21 (7) REFORESTATION.—

22 (A) IN GENERAL.—The term ‘‘reforest23 ation’’ means the reestablishment of forest

24 cover naturally or artificially.
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1 (B) INCLUSIONS.—The term ‘‘reforest2 ation’’ includes—

3 (i) planned replanting;

4 (ii) reseeding; and

5 (iii) managed natural regeneration.

6 (8) REVOLVING LOAN FUND.—The term ‘‘re7 volving loan fund’’ means a State revolving loan

8 fund established under section 5.

9 (9) SECRETARY.—The term ‘‘Secretary’’ means

10 the Secretary of Agriculture.

11 (10) SEQUESTRATION.—The term ‘‘sequestra12 tion’’ means the action of vegetable matter in—

13 (A) extracting carbon dioxide from the at14 mosphere through photosynthesis;

15 (B) converting the carbon dioxide to car16 bon; and

17 (C) storing the carbon in the form of roots,

18 stems, soil, or foliage.

19 SEC. 4. CARBON MANAGEMENT ON FEDERAL LAND; CAR20 BON MONITORING AND VERIFICATION

21 GUIDELINES.

22 (a) DEFINITIONS.—Title XVI of the Energy Policy

23 Act of 1992 is amended by inserting before section 1601

24 (42 U.S.C. 13381) the following:
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1 ‘‘SEC. 1600. DEFINITIONS.

2 ‘‘In this title:

3 ‘‘(1) FOREST CARBON STORAGE.—The term

4 ‘forest carbon storage’ means the quantity of carbon

5 sequestered from the atmosphere and stored in for6 est carbon reservoirs, including forest products.

7 ‘‘(2) CARBON STORAGE PROGRAM.—The term

8 ‘carbon storage program’ means the program estab9 lished by the Secretary of Agriculture under section

10 5 of the Forest Resources for the Environment and

11 the Economy Act, to provide assistance through

12 State revolving loan funds.

13 ‘‘(3) FOREST CARBON RESERVOIR.—The term

14 ‘forest carbon reservoir’ means trees, roots, soils, or

15 other biomass associated with forest ecosystems or

16 products from the biomass that store carbon.

17 ‘‘(4) FOREST MANAGEMENT ACTION.—

18 ‘‘(A) IN GENERAL.—The term ‘forest man19 agement action’ means the practical application

20 of forestry principles to the regeneration, man21 agement, utilization, and conservation of forests

22 to meet specific goals and objectives, while

23 maintaining the productivity of the forests.

24 ‘‘(B) INCLUSIONS.—The term ‘forest man25 agement action’ includes management of forests

26 for aesthetics, fish, recreation, urban values,
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1 water, wilderness, wildlife, wood products, and

2 other forest values.

3 ‘‘(5) SEQUESTRATION.—The term ‘sequestra4 tion’ means the action of vegetable matter in—

5 ‘‘(A) extracting carbon dioxide from the at6 mosphere through photosynthesis;

7 ‘‘(B) converting the carbon dioxide to car8 bon; and

9 ‘‘(C) storing the carbon in the form of

10 roots, stems, soil, or foliage.’’.

11 (b) CARBON MANAGEMENT ON FEDERAL LAND.—

12 Section 1604 of the Energy Policy Act of 1992 (42 U.S.C.

13 13384) is amended—

14 (1) by inserting ‘‘(a) REPORT.—’’ before

15 ‘‘Not’’; and

16 (2) by adding at the end the following:

17 ‘‘(b) CARBON MANAGEMENT ON FEDERAL LAND.—

18 ‘‘(1) IN GENERAL.—Not later than 1 year after

19 the date of enactment of this subsection, after con20 sultation with appropriate Federal agencies, the Sec21 retary of Agriculture shall report to Congress on—

22 ‘‘(A) the quantity of carbon contained in

23 the forest carbon reservoir on national forests

24 derived from the public domain, and the meth-
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1 odology and assumptions used to ascertain that

2 quantity;

3 ‘‘(B) the potential to increase that quan4 tity and provide positive impacts on watersheds

5 and fish and wildlife habitats through forest

6 management actions; and

7 ‘‘(C) the role of forests in the carbon cycle

8 and the contributions of forestry to the global

9 carbon budget.

10 ‘‘(2) CONTENTS.—The report shall also include

11 an assessment of any impacts of the forest manage12 ment actions identified under paragraph (1)(B) on

13 timber harvests, wildlife habitat, recreation, forest

14 health, and other statutory objectives of national for15 est management on a watershed basis.’’.

16 (c) MONITORING AND VERIFICATION OF CARBON

17 STORAGE.—Section 1605(b) of the Energy Policy Act of

18 1992 (42 U.S.C. 13385(b)) is amended by adding at the

19 end the following:

20 ‘‘(5) GUIDELINES ON REPORTING, MONITORING,

21 AND VERIFICATION OF CARBON STORAGE FROM FOR22 EST MANAGEMENT ACTIONS.—

23 ‘‘(A) IN GENERAL.—Not later than 18

24 months after the date of enactment of this

25 paragraph, the Secretary of Agriculture shall—
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1 ‘‘(i) review the guidelines established

2 under paragraph (1) that address proce3 dures for the accurate voluntary reporting

4 of greenhouse gas sequestration from for5 est management actions; and

6 ‘‘(ii) make recommendations to the

7 Secretary of Energy for amendment of the

8 guidelines.

9 ‘‘(B) CARBON AND FORESTRY ADVISORY

10 COUNCIL.—

11 ‘‘(i) ESTABLISHMENT.—The Secretary

12 of Agriculture shall establish a Carbon and

13 Forestry Advisory Council for the purpose

14 of—

15 ‘‘(I) advising the Department of

16 Agriculture in the development of

17 guidelines for accurate voluntary re18 porting of greenhouse gas sequestra19 tion from forest management actions;

20 ‘‘(II) evaluating the potential im21 plementation of the guidelines;

22 ‘‘(III) estimating the effect of

23 proposed implementation on atmos24 pheric carbon mitigation;
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1 ‘‘(IV) reviewing and updating the

2 guidelines;

3 ‘‘(V) assisting the Secretary of

4 Agriculture in reporting annually to

5 Congress on the results of the carbon

6 storage program; and

7 ‘‘(VI) assisting the Secretary of

8 Agriculture in assessing the vulner9 ability of forests to climate change.

10 ‘‘(ii) MEMBERSHIP.—The Advisory

11 Council shall be composed of the following

12 18 members with interest and expertise in

13 carbon sequestration and forestry manage14 ment, appointed by the Secretary:

15 ‘‘(I) 1 member representing na16 tional professional forestry organiza17 tions.

18 ‘‘(II) 2 members representing en19 vironmental or conservation organiza20 tions.

21 ‘‘(III) 1 member representing

22 nonindustrial, private landowners.

23 ‘‘(IV) 1 member representing for24 est industry.
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1 ‘‘(V) 1 member representing for2 estry trade associations.

3 ‘‘(VI) 1 member representing for4 est laborers.

5 ‘‘(VII) 3 members representing

6 the academic scientific community.

7 ‘‘(VIII) 2 members representing

8 State forestry organizations.

9 ‘‘(IX) 1 member representing the

10 Department of Energy.

11 ‘‘(X) 1 member representing the

12 Environmental Protection Agency.

13 ‘‘(XI) 1 member representing the

14 Department of Agriculture.

15 ‘‘(XII) 1 member representing

16 the Department of the Interior.

17 ‘‘(XIII) 1 member representing

18 the National Aeronautics and Space

19 Administration.

20 ‘‘(XIV) 1 member representing

21 the National Oceanic and Atmospheric

22 Administration.

23 ‘‘(iii) TERMS.—

24 ‘‘(I) IN GENERAL.—Except as

25 provided in subclause (III), a member
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1 of the Advisory Council shall be ap2 pointed for a term of 3 years.

3 ‘‘(II) CONSECUTIVE TERMS.—No

4 individual may serve on the Advisory

5 Council for more than 2 consecutive

6 terms.

7 ‘‘(III) INITIAL TERMS.—Of the

8 members first appointed to the Advi9 sory Council—

10 ‘‘(aa) 1 member appointed

11 under each of subclauses (II),

12 (VI), (VII), (VIII), (X), and

13 (XIII) of clause (ii) shall serve

14 an initial term of 1 year; and

15 ‘‘(bb) 1 member appointed

16 under each of subclauses (I),

17 (IV), (VII), (IX), (XI), and

18 (XIV) shall serve an initial term

19 of 2 years.

20 ‘‘(iv) VACANCY.—A vacancy on the

21 Advisory Council shall be filled in the man22 ner in which the original appointment was

23 made.

24 ‘‘(v) CONTINUATION.—Any member

25 appointed to fill a vacancy occurring before
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1 the expiration of the term shall be ap2 pointed only for the remainder of the term.

3 ‘‘(vi) COMPENSATION.—

4 ‘‘(I) IN GENERAL.—Except as

5 provided in subclause (II), a member

6 of the Advisory Council shall serve

7 without compensation, but may be re8 imbursed for reasonable costs in9 curred while in the actual perform10 ance of duties vested in the Advisory

11 Council.

12 ‘‘(II) FEDERAL OFFICERS AND

13 EMPLOYEES.—A member of the Advi14 sory Council who is a full-time officer

15 or employee of the United States shall

16 receive no additional compensation or

17 allowances because of the service of

18 the member on the Advisory Council.

19 ‘‘(III) SUPPORT.—The Secretary

20 of Agriculture shall provide financial

21 and administrative support for the

22 Advisory Council.

23 ‘‘(C) PUBLIC COMMENT.—The Secretary of

24 Agriculture shall provide an opportunity for

25 public comment on the guidelines established
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1 under subparagraph (A) that address proce2 dures for the accurate voluntary reporting of

3 greenhouse gas sequestration from forest man4 agement actions.

5 ‘‘(D) CRITERIA.—

6 ‘‘(i) IN GENERAL.—The recommenda7 tions described in subparagraph (A)(ii)

8 shall include reporting guidelines that—

9 ‘‘(I) are based on—

10 ‘‘(aa) measuring increases in

11 carbon storage in excess of the

12 carbon storage that would have

13 occurred in the absence of the re14 forestation, forest management,

15 forest protection, or other forest

16 management actions; and

17 ‘‘(bb) comprehensive carbon

18 accounting that reflects net in19 creases in the carbon reservoir

20 and takes into account any car21 bon emissions resulting from dis22 turbance of carbon reservoirs ex23 isting at the start of a forest

24 management action;

25 ‘‘(II) include options for—
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1 ‘‘(aa) estimating the indirect

2 effects of forest management ac3 tions on carbon storage, includ4 ing possible emissions of carbon

5 that may result elsewhere as a

6 result of the project’s impact on

7 timber supplies or possible dis8 placement of carbon emissions to

9 other lands owned by the report10 ing party; and

11 ‘‘(bb) quantifying the ex12 pected carbon storage over var13 ious time periods, taking into ac14 count the likely duration of car15 bon stored in the carbon res16 ervoir.

17 ‘‘(ii) ACCURATE MONITORING, MEAS18 UREMENT, AND VERIFICATION.—

19 ‘‘(I) IN GENERAL.—The rec20 ommendations described in subpara21 graph (A)(ii) shall include rec22 ommended practices for monitoring,

23 measurement, and verification of car24 bon storage from forest management

25 actions.
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1 ‘‘(II) REQUIREMENTS.—The rec2 ommended practices shall, to the max3 imum extent practicable—

4 ‘‘(aa) be based on statis5 tically sound sampling strategies

6 that build on knowledge of the

7 carbon dynamics of forests and

8 agricultural land;

9 (bb) include cost-effective

10 combinations of inexpensive

11 measurements of field conditions

12 with modeling to compute carbon

13 stocks and changes in stocks;

14 ‘‘(cc) include guidance on

15 how to sample and calculate car16 bon sequestration across multiple

17 participating ownerships; and

18 ‘‘(dd) not prevent use of

19 more precise measurements, if

20 desired by a reporting entity.

21 ‘‘(E) STATE CARBON STORAGE PRO22 GRAMS.—The recommendations described in

23 subparagraph (A)(ii) shall include guidelines to

24 States for reporting, monitoring, and verifying
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1 carbon storage under the carbon storage pro2 gram.

3 ‘‘(F) BIOMASS ENERGY PROJECTS.—The

4 recommendations described in subparagraph

5 (A)(ii) shall include guidelines for calculating

6 net greenhouse gas reductions from biomass en7 ergy projects, including—

8 ‘‘(i) net changes in carbon storage re9 sulting from changes in land use; and

10 ‘‘(ii) the effect that using biomass to

11 generate electricity (including cofiring of

12 biomass with fossil fuels) has on the dis13 placement of greenhouse gas emissions

14 from fossil fuels.

15 ‘‘(G) AMENDMENT OF GUIDELINES.—Not

16 later than 180 days after receiving the rec17 ommendations from the Secretary of Agri18 culture, the Secretary of Energy, acting

19 through the Administrator of the Energy Infor20 mation Administration, shall revise the guide21 lines established under paragraph (1) to include

22 the recommendations.

23 ‘‘(H) REVIEW OF GUIDELINES BY THE AD24 VISORY COUNCIL.—
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1 ‘‘(i) PERIODIC REVIEW.—At least

2 every 24 months, the Secretary of Agri3 culture shall—

4 ‘‘(I) convene the Advisory Coun5 cil to evaluate the latest scientific and

6 observational information on report7 ing, monitoring, and verification of

8 carbon storage from forest manage9 ment actions; and

10 ‘‘(II) issue revised guidelines for

11 reporting, monitoring, and verification

12 of carbon storage from forest manage13 ment actions as necessary.

14 ‘‘(ii) CONSISTENCY WITH FUTURE

15 LAWS.—The Secretary of Agriculture shall

16 convene the Advisory Council as necessary

17 to ensure that the guidelines for reporting,

18 monitoring, and verification of carbon stor19 age from forest management actions are

20 revised to be consistent with any Federal

21 laws enacted after the date of enactment of

22 this Act that provide recognition, credit, or

23 reward for reductions of atmospheric

24 greenhouse gas concentrations resulting

25 from forest management actions.
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1 ‘‘(6) MONITORING OF CARBON STORAGE PRO2 GRAMS BY PARTICIPATING STATES.—

3 ‘‘(A) IN GENERAL.—Each State that par4 ticipates in the carbon storage program shall, in

5 accordance with the guidelines issued under

6 paragraph (1), monitor and verify carbon stor7 age achieved under the program.

8 ‘‘(B) REPORTS.—

9 ‘‘(i) STATES.—Each State shall report

10 annually to the Secretary of Agriculture on

11 the results of the carbon storage program.

12 ‘‘(ii) SECRETARY OF AGRICULTURE.—

13 The Secretary of Agriculture shall—

14 ‘‘(I) maintain a database on the

15 results of the carbon storage program;

16 and

17 ‘‘(II) report annually to Congress

18 on the results of the carbon storage

19 program, including an assessment of

20 the effectiveness of monitoring and

21 verification.

22 ‘‘(C) REPORTING OF CARBON STORAGE.—

23 ‘‘(i) IN GENERAL.—For each project

24 under the carbon storage program funded,

25 in whole or in part, with funds provided by
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1 nongovernmental organizations, businesses,

2 or other persons, for each year in which

3 the carbon storage is realized from the

4 project, the State shall submit to the non5 governmental organizations, businesses, or

6 other persons and the Secretary of Agri7 culture a report that—

8 ‘‘(I) states the quantity of carbon

9 storage realized; and

10 ‘‘(II) includes the data used to

11 monitor and verify the carbon storage.

12 ‘‘(ii) GUIDELINES.—The carbon stor13 age shall be calculated, monitored, and

14 verified according to guidelines issued

15 under paragraph (5).

16 ‘‘(iii) REVIEW BY THE SECRETARY OF

17 AGRICULTURE.—The Secretary of Agri18 culture shall—

19 ‘‘(I) review each report under

20 clause (i) to verify compliance with

21 the guidelines under clause (ii);

22 ‘‘(II) if the report is in compli23 ance, certify that the report is in com24 pliance, notify the State, participating

25 nongovernmental organizations, busi-
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1 nesses, or other persons, and submit a

2 copy of the certified report to the Sec3 retary of Energy; and

4 ‘‘(III) if the report is not in com5 pliance, notify the State and the par6 ticipating nongovernmental organiza7 tions, businesses, or other persons of

8 any corrections that are needed for

9 certification, and establish an oppor10 tunity for resubmittal by the State.

11 ‘‘(iv) INCLUSION IN DATA BASE.—The

12 Secretary, acting through the Adminis13 trator of the Energy Information Adminis14 tration, shall—

15 ‘‘(I) include the reports under

16 clause (i) in the data base maintained

17 under subsection (b)(4); and

18 ‘‘(II) establish a reporting proc19 ess to ensure the avoidance of double

20 counting of carbon storage from for21 estry activities.’’.

22 SEC. 5. CARBON STORAGE AND WATERSHED RESTORATION

23 PROGRAM.

24 (a) NATIONAL FOREST WATERSHED RESTORATION

25 COOPERATIVE AGREEMENTS.—The Secretary may enter
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1 into cooperative agreements with willing State and local

2 governments, Indian tribes, private and nonprofit entities,

3 and landowners for protection, restoration, and enhance4 ment of fish and wildlife habitat and other resources on

5 public land, Indian land, or private land in a national for6 est watershed.

7 (b) REVOLVING LOAN FUNDS.—

8 (1) IN GENERAL.—In collaboration with State

9 Foresters and nongovernmental organizations, the

10 Secretary shall establish a program to provide assist11 ance through State revolving loan funds to Indian

12 tribes and owners of nonindustrial private forest

13 land to undertake forestry carbon activities.

14 (2) ELIGIBILITY.—

15 (A) PRIVATE FOREST LANDOWNERS.—An

16 owner of private forest land shall be eligible for

17 assistance from a revolving loan fund if the

18 owner owns not more than 5,000 acres of non19 industrial private forest land.

20 (B) INDIAN TRIBES.—Any Indian Tribe

21 shall be eligible for assistance from a revolving

22 loan fund.

23 (3) FORESTRY CARBON ACTIVITIES.—

24 (A) OBJECTIVES OF FORESTRY CARBON

25 ACTIVITIES.—Eligible forestry carbon activities
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1 shall be activities that, when evaluated in their

2 entirety for a watershed—

3 (i) increase long-term carbon storage

4 or provide new sources of biomass feed5 stocks for renewable energy generation;

6 and

7 (ii) have a positive impact on water8 sheds, fish habitats, and wildlife diversity.

9 (B) GUIDANCE.—The Secretary, in col10 laboration with States, shall provide guidance

11 on eligible forestry carbon activities based on

12 the criteria of this Act, recognizing that States

13 should have maximum flexibility to achieve the

14 purposes of this Act in ways most appropriate

15 for each State.

16 (C) ACTIVITIES REQUIRED UNDER OTHER

17 LAW.—Funding shall not be provided under

18 this section for activities required under other

19 applicable Federal, State, or local laws.

20 (D) PREAGREEMENT ACTIVITIES.—Fund21 ing shall not be provided for costs incurred be22 fore entering into a loan agreement with the

23 State under this Act.

24 (E) LIMITATION ON LAND CONSIDERED

25 FOR FUNDING.—States shall not enter into new
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1 loan agreements under this Act to fund refor2 estation of land that has been harvested after

3 the date of enactment of this Act if the land4 owner receives revenues from the harvest suffi5 cient to reforest the land.

6 (F) NATIVE SPECIES.—Funding of refor7 estation activities shall be provided only for a

8 species that is native to a region, with pref9 erence given to species that formerly occupied

10 the land.

11 (G) SUSTAINABLE FOREST MANAGEMENT

12 PLAN.—States shall give priority to projects on

13 land under a sustainable forestry management

14 program or forest stewardship plan, if the

15 projects are consistent with the program or

16 plan.

17 (H) COOPERATIVE AGREEMENTS.—Cooper18 ative agreements entered into under this section

19 shall be eligible for loan funds.

20 (4) USE OF LOAN FUNDS.—The proceeds of a

21 loan under the program—

22 (A) may be used to pay—

23 (i) the cost of purchasing and plant24 ing tree seedlings; and
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1 (ii) other costs, including consultant

2 and contractor fees, associated with plan3 ning, site preparation, tree planting, forest

4 management, and other forest manage5 ment actions; and

6 (B) may not be used to—

7 (i) pay the owner for the owner’s own

8 labor; or

9 (ii) purchase capital items or expend10 able items, such as vehicles, tools, and

11 other equipment.

12 (5) LOAN AMOUNT.—The amount of a loan

13 made from a revolving loan fund shall not exceed—

14 (A) 100 percent of total project costs,

15 whether they constitute the only funding source

16 or are used in combination with any other

17 funds received from any other source; or

18 (B) $100,000 during any 2-year period.

19 (6) LOAN TERMS.—A loan agreement under the

20 program shall—

21 (A) require that all loan obligations be re22 paid to the State with interest at a rate of at

23 least 5 percent per annum—

24 (i) at the time of harvest of land cov25 ered by the program; or
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1 (ii) in accordance with any other re2 payment schedule determined by the State;

3 (B) include provisions that provide for pri4 vate insurance or that otherwise release the

5 owner from the financial obligation for any por6 tion of the timber, forest products, or other bio7 mass that—

8 (i) is lost to insects, disease, fire,

9 storm, flood, or other natural destruction

10 through no fault of the owner; or

11 (ii) cannot be harvested because of re12 strictions on tree harvesting imposed by

13 the Federal, State, or local government

14 after the date of the agreement;

15 (C) impose a lien on all timber, forest

16 products, and biomass grown on land covered

17 by the loan, with an assurance that the terms

18 of the lien shall transfer with the land on sale,

19 lease, or transfer of the land;

20 (D) include a buyout option that—

21 (i) specifies financial terms allowing

22 the owner to terminate the agreement be23 fore harvesting timber from the stand es24 tablished with loan funds; and

25 (ii) repays the loan with interest;
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1 (E) recognize that, until the loan is paid in

2 full by the participating landowner or otherwise

3 terminated in accordance with this Act, all re4 ductions in atmospheric greenhouse gases

5 achieved by the project funded by the loan are

6 attributable to the non-Federal entities that

7 provide funding for a loan (including the State

8 or any other person, company, or nongovern9 mental organization that provides funding to

10 the State for purposes of issuing the loan); and

11 (F) include provisions for the monitoring

12 and verification of carbon storage.

13 (7) CANCELLATION OF LOAN TERMS FOR PER14 MANENT CONSERVATION.—

15 (A) IN GENERAL.—The State shall cancel

16 the loan agreement under paragraph (6) and

17 any liens on the timber, forest products, and

18 biomass under paragraph (6)(C) if the borrower

19 donates to the State or another appropriate en20 tity a permanent conservation easement that—

21 (i) furthers the purposes of this Act,

22 including managing the land in a manner

23 that maximizes the forest carbon reservoir

24 of the land; and
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1 (ii) permanently protects the covered

2 private forest land and resources at a level

3 above what is required under applicable

4 Federal, State, and local law.

5 (B) CONTINUATION OF FOREST MANAGE6 MENT ACTIONS.—The conservation easement

7 may allow the continuation of forest manage8 ment actions that increase carbon storage on

9 the land and forest or otherwise further the

10 purposes of this Act.

11 (C) TAX TREATMENT.—Only the value of

12 the conservation easement in excess of the

13 amount owed under the repayment terms of a

14 land agreement shall be tax deductible to the

15 extent allowed under applicable Federal, State,

16 or local law.

17 (8) REINVESTMENT OF FUNDS.—All funds col18 lected under a loan issued under this Act (including

19 loan repayments, loan buyouts, and any interest pay20 ments) shall be reinvested by the State in the pro21 gram and used by the State to make additional

22 loans under the program in accordance with this

23 subsection.

24 (9) RECORDS.—The State Forester shall—
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1 (A) maintain all records related to any

2 loan agreement funded from a revolving loan

3 fund; and

4 (B) make the records available to the pub5 lic.

6 (10) ALLOCATION OF FUNDS.—

7 (A) IN GENERAL.—The Secretary shall al8 locate funds available for loans to a State after

9 determining that the State has implemented a

10 system to administer the loans in accordance

11 with this Act.

12 (B) MATCHING FUNDS.—

13 (i) IN GENERAL.—Effective beginning

14 in the second year of the participation of

15 a State in the program under this section,

16 to be eligible to participate in the program,

17 the participating State shall provide

18 matching funds equal to at least 25 per19 cent of the Federal funds made available

20 to the State for the program.

21 (ii) FORM.—The State may provide

22 the matching funds in the form of in-kind

23 administrative services, technical assist24 ance, and procedures to ensure account25 ability for the use of Federal funds.
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1 (C) FORMULA.—

2 (i) IN GENERAL.—Not later than 180

3 days after the date of enactment of this

4 Act, in consultation with State Foresters,

5 the Secretary shall—

6 (I) establish a formula under

7 which, subject to clause (ii), Federal

8 funds shall be distributed under this

9 section among eligible States; and

10 (II) report the formula and

11 methodology to Congress.

12 (ii) BASIS.—The formula shall—

13 (I) be based on maximizing the

14 potential for meeting the objectives of

15 this Act;

16 (II) give appropriate consider17 ation to—

18 (aa) the acreage of

19 unstocked or underproducing pri20 vate forest land in each State

21 within national forest watersheds;

22 (bb) the potential produc23 tivity of such land;

24 (cc) the potential long-term

25 carbon storage of such land;
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•S 1457 IS

1 (dd) the potential to achieve

2 other environmental benefits,

3 such as restoration of native for4 est communities in riparian

5 areas;

6 (ee) the number of owners

7 eligible for loans under this sec8 tion in each State; and

9 (ff) the need for reforest10 ation, timber stand improvement,

11 or other forestry investments

12 consistent with the objectives of

13 this Act; and

14 (III) give priority to States that

15 have experienced or are expected to

16 experience significant declines in em17 ployment levels in the forestry indus18 tries due to declining timber harvests

19 on Federal land.

20 (11) PRIVATE FUNDING.—A revolving loan fund

21 may accept and distribute as loans any funds pro22 vided by nongovernmental organizations, businesses,

23 or persons in support of the purposes of this Act.

24 (12) BONNEVILLE POWER ADMINISTRATION.—
33

•S 1457 IS

1 (A) IN GENERAL.—The States of Wash2 ington, Oregon, Idaho, and Montana may apply

3 for funding from the Bonneville Power Admin4 istration for purposes of funding loans that

5 meet both the objectives of this Act and the fish

6 and wildlife objectives of the Bonneville Power

7 Administration under the Pacific Northwest

8 Electric Power and Conservation Act (16

9 U.S.C. 839 et seq.).

10 (B) APPLICATION OF REQUIREMENTS

11 UNDER OTHER LAW.—An application under

12 subparagraph (A) shall be subject to all rules

13 and procedures established by the Pacific

14 Northwest Electric Power and Conservation

15 Planning Council and the Bonneville Power Ad16 ministration under the Pacific Northwest Elec17 tric Power and Conservation Act (16 U.S.C.

18 839 et seq.).

19 (13) AUTHORIZATION OF APPROPRIATIONS.—

20 There is authorized to be appropriated to carry out

21 the revolving loan program under this section for

22 each of fiscal years 2001 through 2010, respectively,

23 an amount equal to the amount of civil penalties col24 lected under section 113 of the Clean Air Act (42

25 U.S.C. 7413) and under section 309(d) of the Fed-
34

•S 1457 IS

1 eral Water Pollution Control Act (33 U.S.C.

2 1319(d)) in the second preceding fiscal year.

Æ